Year-end Spending/Tax Package Includes ARTBA Priorities

Congressional leaders early Wednesday (Dec. 16) released the details of a government-wide FY 2016 spending bill and $650 billion package of tax cuts that includes a number of provisions benefiting the transportation construction industry. The House and Senate are expected to approve the measures later this week before adjourning for the year.

Boost public transportation spending from $10.7 billion to $11.5 billion. The measure fully funds the FAST Act’s $9.35 billion authorization level for transit formula grants, but falls $124 million short of the authorized level for the capital investment grant. It will provide $2.18 billion—a $270 million increase—for the program instead of the FAST Act’s prescribed $2.3 billion. Transit capital investment grants are supported by the general fund as opposed to the Highway Trust Fund’s Mass Transit Account, which provides the House and Senate Appropriations Committees more discretion to set funding levels.

Maintain Airport Improvement Program investment at $3.35 billion. The Obama Administration’s “TIGER” grant program, which provides funds for a variety of modes of transportation projects including highways and transit, will continue to receive $500 million.

The tax package will make permanent a number of existing temporary tax breaks and provide multi-year extensions of others. Of particular importance to the transportation construction industry, the Section 179 expensing deduction for small business capital purchases are permanently restored to the $500,000 limit and indexes this threshold to inflation. The measure also extends the 50 percent bonus depreciation allowing immediate expensing of asset acquisitions for 2015, 2016 and 2017. Bonus depreciation would be reduced to 40 percent in 2018 and 30 percent in 2019.

ARTBA joined 27 other national construction associations in a Nov. 24 letter to the bicameral, bipartisan congressional leadership urging them to extend these capital investment incentives for at least 2015 and 2016.

It is also notable that the package does not include provisions pushed by banking lobbyists and their allies on Capitol Hill to dilute one of the Federal Reserve-related revenue generating mechanisms included in the FAST Act to support the new law’s increased highway and transit investment levels. The banking industry continues to be upset that highway/transit reauthorization bill reduces the annual dividend provided to banks with more than $10 billion in deposits in the Federal Reserve System.